Our expert team regularly defend public interest winding up petitions and can help get them dismissed from court. If a company has been wound up in the public interest, our team can help defend any director disqualification proceedings which will inevitably follow. Let our team help you avoid the worst consequences of a public interest petition.
If there was ever a star rating for law firms, Francis Wilks & Jones would score five stars plus. Professional and pro-active, they were able to understand my problem quickly, provide expert advice, outline a solution and put it into place with a successful outcome. I should have gone to them soonerA client we successfully defended in director disqualification and insolvency related proceedings
A winding up order is an order made at court usually made to wind up the affairs of a limited company registered in England and Wales.
The reasons for winding up are numerous but usually originate from unsatisfied demands for payment by creditors – i.e. where a company is unable to pay its debts as and when they fall due (one of the statutory definitions of insolvency).
- in some circumstances, a company may have assets but not the business to generate income sufficient to pay creditors in which case the creditors may issue claims or, if judgment is obtained and still not paid, the creditor may petition for the company to be wound up;
- if a director does not protect creditors’ interests in such circumstances, they may be personally liable for such wrongful or fraudulent trading after the company is placed into liquidation.
However, some companies may deliberately or recklessly commence trading or continue trading in complete disregard for moral ethics or the public interest. Such companies often prey on certain types of consumer and are set up to prevent any formal winding-up action by creditors taking place whilst they continue to trade.
A “boiler room” tactic is often used by companies who trade contrary to the public interest.
This term is derived from the idea that such companies sell goods to members of the public from small cramped offices with individuals calling members of the public from telephone lists, using high pressure sales tactics motivated by the caller’s need to generate their commission.
Types of individual targeted by boiler rooms
The type of individual targeted by such companies varies but, in a majority of cases, it is the elderly (by reason of their access to financial resources and, in some circumstances, their vulnerability) or otherwise vulnerable individuals.
It is well-known that these companies (or rather the individuals behind them) constantly resurrect themselves and indeed exchange lists of individuals who are known to be responsive to such calls and may be known to have wealth and be willing to invest.
Types of fraud
It is impossible within this article to list all types of business which may be run contrary to the public interest. However, typical examples are fine wines, coloured diamonds, minerals, rare earth metals and, more recently, property investments.
Other types of fraud may be tax frauds, in recent years VAT Carousal fraud featured quite heavily, short firm frauds, where false companies are set up to generate a credit history to enable orders to be made which go unpaid, and numerous types of financial miss-selling by unregulated financial advisers.
Winding up by the Secretary of State
To combat these risks to the public, the Secretary of State will investigate any complaint received in respect of any company carrying out the above types of activity (or any other fraudulent or other activity that would appear to be contrary to the public interest).
Following these investigations, a winding up order may be presented by the Insolvency Service Public Interest Unit against the company seeking a winding up order on the grounds that it is not in the public interest for the company to be permitted to continue trading.
Read more about Public Interest winding up order.
Director disqualification following a public interest winding up order
Where a company is wound-up in the public interest, the directors’ conduct in the period leading up to the making of a winding up order will almost certainly be examined in great detail.
This may lead to claims brought by the company and its liquidators for damages and, more commonly, a claim for director disqualification, quite often for a period of between 11-15 years. An initial letter will be sent notifying you of the intention to pursue your disqualification, following which disqualification proceedings may be commenced if matters cannot be negotiated outside court.
At Francis Wilks & Jones we are able to advise on any risk you or your business may face as a result of being subject to such circumstances or being faced by a Public Interest winding up petition. Please call any member of our wining up petition & director disqualification team for a consultation now.
I was greatly impressed with the commercial, tactical and technical ability of the team at FWJ. They quickly got to grips with a complex set of facts and, through their hard work, had the proceedings against me dropped and a significant proportion of my legal fees repaid. I couldn’t recommend them highly enoughA director we defended against a disqualification claim and other claims brought by a liquidator